US stocks split sharply on Thursday as the Dow pushed to a new record while the Nasdaq and S&P 500 fell, dragged down by fresh concerns over Big Tech’s AI spending. The divergence comes just one day after the Federal Reserve delivered its third rate cut of the year, extending the market’s late-2025 momentum — but also spurring uncertainty about the path for policy in early 2026.
The Dow Jones Industrial Average climbed roughly 1% in early afternoon trade, pushing above its previous record as investors rotated out of tech and into financials and industrials. Meanwhile, the Nasdaq dropped about 1% and the S&P 500 slipped 0.3%, weighed down by a slide in megacaps following a disappointing earnings reaction for Oracle. The mixed tape underscores a widening split between interest-rate beneficiaries and companies at the center of the AI spending boom.
Market Movers:
- Oracle (ORCL) – Shares fell over 12% after quarterly results revealed a steep shortfall in cloud revenue and a massive jump in AI-related capital expenditures. The company’s plan to spend $50 billion on data centers this year renewed fears of runaway AI investment and pressured valuations across the sector.
- Nvidia (NVDA) – The chipmaker fell more than 2.5% as Oracle’s ballooning AI infrastructure costs fueled concerns that hyperscalers are overextending. The decline extends a month-long slide for Nvidia amid debate over whether near-term demand can sustain current spending levels.
- Broadcom (AVGO) – Shares dropped over 2% as the broader AI complex came under pressure and investors braced for the company’s earnings report later in the day. Analysts say sentiment has grown increasingly sensitive to any sign that enterprise spending is slowing.
- Planet Labs (PL) +22% — Planet Labs surged after delivering a strong third-quarter report and raising both Q4 and full-year revenue expectations, signaling accelerating demand across government and commercial contracts. Management highlighted improved visibility into future orders and emphasized sustaining the Q4 growth rate into fiscal 2027 as new wins ramp.
- Gemini Space Station (GEMI) +6.5% — Shares climbed after its derivatives arm, Titan, secured a designated contract market license from the CFTC, allowing it to offer regulated prediction markets to U.S. customers. The approval opens the door to future crypto-related derivatives and reinforces Gemini’s strategy to build a broader financial services platform.
- Enova International (ENVA) +6.4% — Enova rose after announcing a $369 million cash-and-stock acquisition of Grasshopper Bancorp, which is expected to be immediately accretive to earnings. The company projected more than 15% EPS accretion within the first year, rising above 25% once operational synergies fully materialize.
- Oxford Industries (OXM) -24% — Oxford Industries sank after cutting its full-year sales and profit outlook, citing tariff-driven product constraints and softer early-quarter trends heading into the holiday season. Large impairment charges related to its Johnny Was brand pushed projected GAAP earnings sharply lower, overshadowing otherwise solid Q3 results.
Fed Cut Lands, but Policy Path Remains Unclear
Wednesday’s rate cut reinforced expectations that the Fed is entering a more patient phase. Chair Jerome Powell emphasized the strong performance of the US economy while hinting that January is “off the table” for another move. At the same time, he acknowledged that tariffs imposed under President Trump have added short-term inflation pressure that the Fed views as temporary.
Markets initially welcomed the combination of easing and confidence, but Thursday’s hefty jump in jobless claims fueled doubt. Weekly filings climbed to 236,000 — the steepest rise since 2020 — following last week’s unexpected dip to a three-year low. The mixed picture heightens attention on the delayed November jobs report arriving next Tuesday, which could help calibrate expectations for early-2026 policy.
Trade Deficit Shrinks, Offering a Surprise Boost to GDP Outlook
In an unexpected bright spot, the US trade deficit narrowed to its smallest level in more than five years, driven by a surge in exports and softer import growth. The improvement is poised to support third-quarter GDP revisions and may help offset some of the concerns emerging from labor data. Notably, the deficit with China dropped sharply, aligning with the administration’s ongoing tariff and enforcement strategy.
Energy Markets Struggle as Geopolitical Tensions Rise
Oil prices extended their decline with Brent crude slipping below $62 and WTI sliding under $58. The weakness followed Venezuela’s condemnation of a US seizure of a sanctioned tanker and came as OPEC+ maintained its view that markets will remain balanced in 2026, countering a wave of bearish forecasts that warn of a deep supply glut next year. Analysts at several major banks continue to warn that prices could fall sharply unless OPEC curbs production.
Looking Ahead
All eyes now turn to a high-stakes stretch of data and earnings catalysts. Broadcom, Costco, and Lululemon will offer fresh reads on consumer strength, enterprise spending, and AI infrastructure budgets. Next Tuesday’s jobs report will set the tone for January’s policy expectations, while investors watch for signs that the rotation out of tech and into cyclicals has staying power. For now, the Dow’s record-setting run reflects confidence in the broader economy — but the pressure on megacap tech underscores just how fragile the AI narrative has become heading into the final weeks of 2025.